Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Gold isn''t the currency of terrorist group Hamas -- it''s U.S. dollars

By cpowell
Created 2006-06-15 07:00

From AMEInfo, Dubai
Wednesday, June 14, 2006

http://www.ameinfo.com/88792.html [1]

A concerted intervention by central banks has temporarily depressed
the gold market providing an excellent buying opportunity for those
who missed the recent gold rally. But this savage price fluctuation
has highlighted the volatility of gold and its dangers for traders
who decide to do more than buy and hold.

Arabian investors should be piling into gold at these price levels.
For the recent rout of gold prices is entirely down to a concerted
attack on gold by the central banks, and the fundamental factors
supporting the gold price have got stronger and not weaker.

First, the US dollar is weakening against most currencies. This is
supportive of gold which is priced in US dollars. Most currency
analysts now believe the dollar is heading lower, and that will keep
the gold price rising at least in dollar terms.

Secondly, inflation is now re-appearing all over the world as a
menace to economic growth and capital market stability. Gold is the
classic 'safe haven' investment and a hedge against inflation.

Therefore, Arabian investors who want to preserve their wealth in
this environment should buy gold and not equities or bonds whose
future is much more open to doubt. Indeed, the weakness seen on
global capital markets in the past month may be just a sign of days
to come, perhaps this autumn, with a full scale financial crisis.

Gold will definitely be the place to have some money in such an
environment, and precious metals will likely outperform all other
financial assets.

In truth the central banks that manipulate currency markets, and
gold is a quasi-currency, have deliberately attacked the gold
market, according to traders who follow these matters day to day.

They hope by attacking a symptom of inflation that they may find a
cure, but this is a hopeless task, and with the inflation genie out
of the bottle any suppression of symptoms will not last for very
long. And once investors really 'discover' gold the fireworks in the
gold market are going to be spectacular.

For the entire stock market capitalization of gold stocks is less
than half the value of Microsoft, reflecting the extreme
undervaluation of gold which has lagged behind other commodities in
the recent commodities boom. Once global investment interest is
really focused on gold the flow of money will produce amazing gains
in this sector.

Indeed, another very clear reason to believe that the gold rally has
corrected and not gone into a bear market is that the obvious signs
of a runaway bull market are not yet in evidence. This is a market
traded by central banks and a few professional investors, and has
yet to attract a rush of mass rush of investors.

Gold supporters argue that such are the fundamentals of global
finance today that an increase in the gold price is inevitable.
Buying now while prices have been temporarily depressed is thus a
great opportunity. But gold prices are volatile and trading is only
for the true experts, and that should be the real message to learn
from the past few weeks.


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